The Bookseller.com

5th December 2008

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Education grows for Huveaux

03.03.08 Philip Jones

Huveaux's education division, including Letts, Leckie & Leckie and Lonsdale, was the star performer for the group that admitted to a "disappointing year" in 2007.

Revenue grew by £1.1m to £46.1m at Huveaux despite two sizable acquisitions in the previous year, and earnings before interest, tax, amortisation and non-trading items (EBITDA) declined from £7.2m to £5.8m, a 19% fall.

However, sales at its education businesses almost doubled from £6.8m to £12.1m, with EBITDA up to £2.9m, compared with £2.2m a year earlier. The group said: "Revenue growth was substantial in our Scottish business, Leckie & Leckie, and indeed all our education companies showed double digit EBITDA growth. The integration of Letts was completed during the year and it showed very pleasing growth in its sales direct to schools where historically it has not been strong."

Leckie & Leckie saw a 13% revenue increase over 2006, with full year revenue of £2.6m. Sales to retail were up 7%, with school sales up 21% on 2006. Lonsdale revenue finished at £3.1m, 5% up on 2006. Trade sales and new publishing were responsible for the increase, the group said.

Letts' revenue finished at £6.4m, with school sales performing particularly well, up 21% on 2006. Sales to high street retail customers were also "very strong", up nearly 5% on prior year. However sales to independents and supermarkets fell in 2007. The group said: "This has been a lucrative sales channel for Letts and, coupled to a smaller presence in the supermarket channel than in previous years, meant that Letts retail sales outside the high street bookstores declined year on year. However, signs are that this was a cyclical effect, and 2008 should see a return to previous sales levels through these outlets."

Huveaux said that UK schools market for educational publishing showed modest growth in 2007, although it was boosted in Scotland, while the traditional retail market for educational publishing (high street bookstores) also increased in value modestly in 2007 by 2.3%, slightly behind overall book sales growth.

Nevertheless, Huveaux added: "We will continue our portfolio expansion throughout 2008 both in print and online, and are very confident of the future for this business." it added: "Retail markets may be exposed to a downturn in consumer confidence, but the education book sector has usually been immune to this trend as revision books and study guides are a relatively small outlay and are viewed as an investment for a child's future, even more so in times of economic uncertainty. The education book sector is therefore expected to continue to show modest growth and we feel well placed to take advantage."

In December Huveaux terminated talks with private equity firm August Equity about a possible offer for the company.

John van Kuffeler, non-executive chairman of Huveaux, said: "2007 was a disappointing year for Huveaux with a 19% fall in normalised EBITDA. We responded to the changing market conditions by adapting parts of our business model. This included a series of successful new business initiatives and the lowering of our cost base. As a result, we won good levels of new business in December and this has ensured a good start to 2008."

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